Australia has achieved a remarkable improvement in a global ranking of budget positions, according to the latest figures from the International Monetary Fund.
Australia had the second strongest budget balance as a share of GDP among G20 countries last year, up from equal 14th position in 2021, the IMF Fiscal Monitor released overnight shows.
This dramatic rise is a testament to the Albanese Government’s responsible approach to budget management.
Australia now ranks ahead of advanced economies like Germany, Japan, the United Kingdom and the United States. The calendar year data from the IMF combines the fiscal positions of both the Commonwealth and state and territory governments.
Our responsible management is ensuring that fiscal policy is taking the pressure off inflation when it is at its highest.
The Albanese Government delivered Australia’s first surplus in 15 years in 2022–23, achieving a $100 billion turnaround in the forecast inherited from the former government. A second surplus in next month’s Budget remains within reach.
While the IMF report recommends governments make further efforts to repair their fiscal positions, it notes these need to take into account the changing outlook for growth.
“The pace of fiscal consolidation should be calibrated to strike a balance between fiscal risks and the strength of private demand,” the IMF said.
This is consistent with the Government’s approach to ensuring our budget settings are right for the evolving circumstances, including the much smaller revenue upgrades expected in the May Budget and the shift in the balance of risks in our economy from inflation to growth.
Despite the substantial progress we’ve made, we know it will take more than a single budget or a single term to clean up the mess left behind by the Coalition.
Like our first two budgets, this year’s Budget will continue to put a premium on what’s responsible, affordable and methodical.
We know a stronger budget position is not an end in itself but an important way to provide cost‑of‑living relief without adding to inflation, build foundations for sustainable economic growth and fund the nation’s most pressing priorities.
We are getting the budget in better nick at the same time as delivering billions of dollars in cost‑of‑living relief to Australians doing it tough and providing a tax cut for every Australian taxpayer from 1 July.